Case Law Details
Sopan Developers Vs PCIT (ITAT Rajkot)
Amendment for charging the tax on the notional rent with respect to the properties held as stock in trade was applicable from the assessment year 2018-19 and subsequent assessment year. As such, the amended provision is not applicable for the year under consideration. Thus the question of calculating the rental income with respect to the units of the properties held as stock in trade does not arise. Thus we hold that there was no error in the order of the AO framed under section 143(3) of the Act which is causing prejudice to the interest of revenue. For invoking the provisions of section 263 of the Act, it is necessary that the twin conditions should be satisfied. The order should be erroneous and prejudicial to the interest of revenue. Once there is no error the order of the AO, the same cannot be subject to the provisions of section 263 of the Act. In view of the above and after considering the facts in totality, we hold that there is no error in the assessment framed by the AO under section 143(3) of the Act causing prejudice to the interest of revenue. Thus, the revisional order passed by the learned PCIT is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Principal Commissioner of Income Tax, Rajkot-1, dated 08/02/2022 arising in the matter of assessment order passed under s. 263 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) relevant to the Assessment Year (A.Y.) 2017-18.
2. The only interconnected issue raised by the assessee is that the learned Principal CIT erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of Revenue.
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